Earlier today, I was reading a Reuters report on Apple's “disappointing” quarterly results and the article mentioned something called the “Analysts Revision Model”. This model, developed by a company called StarMine, scores companies on a scale of 1-100 based on “changes in analyst sentiment”. StarMine claims the ARM score is “highly predictive of relative price movement” which it may well be. But let's evaluate the scores currently assigned to Apple and it's closest rivals:
- Apple: 10/100
- Microsoft: 19/100
- Google: 34/100
- Nokia: 82/100
- Samsung: 89/100
- Research in Motion: 100/100
On Twitter this morning (1, 2, 3) I was fairly harsh on the value of the model itself, but after thinking about it more, I realized the real blame here falls on the “analysts” upon whose machinations this model is based. What the scores are basically telling us is how valuable the insights of those analysts into each of the companies listed is worth.
In the case of Apple? Not much.